A Bangladeshi non-government organisation has misappropriated an international grant of nearly $1.9 million, meant to fight AIDS and tuberculosis, through fabricated bank statements, cheques and accounting journals.
According to a probe report of The Global Fund to Fight AIDS, Tuberculosis and Malaria, Padakhep Manabik Unnayan Kendra diverted the money in 2004-09 and tried to justify the withdrawals with fake and forged documents.
The report, released on July 11, said the withdrawals -- about 52 percent of the total $3.62 million fund disbursed to the NGO -- never took place. The organisation maintained false bank account numbers to conceal the fund diversion.
The Global Fund, which so far has provided $82 million to ministries and NGOs in Bangladesh to tackle the deadly diseases, said the misappropriated amount might be even more. The report recommended recovering the loss from Padakhep.
The Global Fund, an international financing institution, has so far committed $22.6 billion in 150 countries to support large-scale prevention, treatment and care programmes.
The report reads Padakhep made significant efforts to conceal the fund diversion by fraudulently maintaining manufactured records to justify the withdrawals that never actually happened.
The fabricated papers include false bank statements and cheques, accounting journals in fictitious programmes and activities and invoices for made-up purchases.
“Vendors who allegedly provided goods and services under the programme also confirmed in several instances that the bids, invoices, and cheques bearing their companies' names were not authentic and that the vendors never provided the goods or services and they never received the funds,” explains the report, prepared after a year-long investigation by the Office of the Inspector General (OIG) of The Global Fund.
Exposure of some financial irregularities of Padakhep in two AIDS prevention projects financed by The Global Fund in mid-2009 led the donor into conducting the investigation.
Save the Children, a globally active NGO and also the principal recipient of The Global Fund money, had appointed Padakhep as the sub-recipient. It found irregularities while monitoring the project implementations.
Save the Children ended its contracts with Padakhep on November 24 last year.
Padakhep challenged the contract termination and is now in a legal battle with Save the Children. It even claimed $14.23m in damages.
According to the report, Padakhep held its funds with NCC Bank between November 2004 and December 2009. Later, it moved its accounts to Dutch Bangla Bank.
The OIG investigation team found that Padakhep had concealed the genuine bank statements maintained at the NCC bank and instead created and produced its own versions of statements, which were in fact fictitious.
The NGO often reported different account numbers on its forged bank statements than the NCC Bank actually used. Padakhep produced falsified bank statements and provided those to Save the Children in order to back the expenditures, the report says.
The report used scanned copies of the genuine and fake banks account numbers. It drew a comparison that proved bank statements provided by Padakhep and those of NCC Bank were not the same. The amounts and dates of fund withdrawals were also different in the genuine and fake bank statements.
The OIG team showed the versions of bank documents provided by Padakhep to senior NCC Bank officials who confirmed that the statements were not issued by the bank. However, the probe body did not find evidence of the practice in DBB Bank accounts.
To maintain consistency between the false bank statements and supporting documentation, Padakhep created, produced and utilised extensive and elaborate false documentation to support fabricated bank statements, and conceal the actual nature of its expenditures.
The accounting journals reflected the transactions in the forged statements.
The OIG in its report placed an accounting journal page and the corresponding genuine and fraudulence bank statements. A transaction of Tk 61,700 for a workshop described in the accounting journal appeared in both genuine and false statements, but a withdrawal of Tk 35,000 was only in the false bank statement.
The OIG team said the amount of Tk 35,000 had never actually been withdrawn.
Padakhep has been working in the fields of micro-credit, education, health, agriculture and environment for 25 years with funds from various international donors. At present, it is running 32 projects all over Bangladesh.
VERSIONS OF PADAKHEP
Terming the report one-sided, Padakhep Executive Director Iqbal Ahammed said Save the Children, being the principal recipient of the fund, was equally responsible if anything happened since it supervised, monitored and audited the project activities.
“Padakhep can't do anything through bypassing Save the Children and its staff. If anything happened then that should have been come out at the time of the happening, but Save the Children had no objection to our activities then,” he said, accusing the OIG of not taking and including its comments in the report.
Asked how he could deny the proof of forgery and fraudulence to conceal a misappropriation of funds, Iqbal Ahammed said that while many points of the report were not correct, they needed to verify the images and the proof used in the report.
“Padakhep is going to challenge the report. We have serious comments on the report, but will not give that since the matter is now before a tribunal,” he told The Daily Star.
REACTION OF SAVE THE CHILDREN
The OIG report clearly establishes that Padakhep has misappropriated not less than $1.89 million of donor funds intended to fight the scourge of HIV and AIDS in Bangladesh, said its Country Director Michael McGrath through an email.
He said the report was the result of more than a year of intensive investigation, involving discussions not only with Padakhep and its bank, but also with health ministry officials and principal and sub-recipients of The Global Fund grants.
“The evidence is overwhelming. Padakhep has been provided with an opportunity to comment on the draft report. If the OIG did not incorporate the changes requested by Padakhep, I can only assume that it was because they were not convinced as to the accuracy or truthfulness of the information provided by Padakhep,” said McGrath.
He termed Padakhep's claim that the principal recipient shared equal culpability for the fraud as absolutely “outrageous”.
“If a criminal is caught by the police and charged with serious crimes, would we say that the police were equally responsible for the crimes committed, because it took them some time to identify the culprit and assemble the evidence?”
The only reason why Padakhep is seeking to prevent public discussion of the OIG report is that they do not want the people, the government and the donors to know the details of the donor fund misappropriation which they have been responsible for over an extended period of time.
Instead of taking action against the NGO, the health ministry has recommended that Padakhep undertake a Tk 24 crore project fighting HIV/AIDS.
According to a probe report of The Global Fund to Fight AIDS, Tuberculosis and Malaria, Padakhep Manabik Unnayan Kendra diverted the money in 2004-09 and tried to justify the withdrawals with fake and forged documents.
The report, released on July 11, said the withdrawals -- about 52 percent of the total $3.62 million fund disbursed to the NGO -- never took place. The organisation maintained false bank account numbers to conceal the fund diversion.
The Global Fund, which so far has provided $82 million to ministries and NGOs in Bangladesh to tackle the deadly diseases, said the misappropriated amount might be even more. The report recommended recovering the loss from Padakhep.
The Global Fund, an international financing institution, has so far committed $22.6 billion in 150 countries to support large-scale prevention, treatment and care programmes.
The report reads Padakhep made significant efforts to conceal the fund diversion by fraudulently maintaining manufactured records to justify the withdrawals that never actually happened.
The fabricated papers include false bank statements and cheques, accounting journals in fictitious programmes and activities and invoices for made-up purchases.
“Vendors who allegedly provided goods and services under the programme also confirmed in several instances that the bids, invoices, and cheques bearing their companies' names were not authentic and that the vendors never provided the goods or services and they never received the funds,” explains the report, prepared after a year-long investigation by the Office of the Inspector General (OIG) of The Global Fund.
Exposure of some financial irregularities of Padakhep in two AIDS prevention projects financed by The Global Fund in mid-2009 led the donor into conducting the investigation.
Save the Children, a globally active NGO and also the principal recipient of The Global Fund money, had appointed Padakhep as the sub-recipient. It found irregularities while monitoring the project implementations.
Save the Children ended its contracts with Padakhep on November 24 last year.
Padakhep challenged the contract termination and is now in a legal battle with Save the Children. It even claimed $14.23m in damages.
According to the report, Padakhep held its funds with NCC Bank between November 2004 and December 2009. Later, it moved its accounts to Dutch Bangla Bank.
The OIG investigation team found that Padakhep had concealed the genuine bank statements maintained at the NCC bank and instead created and produced its own versions of statements, which were in fact fictitious.
The NGO often reported different account numbers on its forged bank statements than the NCC Bank actually used. Padakhep produced falsified bank statements and provided those to Save the Children in order to back the expenditures, the report says.
The report used scanned copies of the genuine and fake banks account numbers. It drew a comparison that proved bank statements provided by Padakhep and those of NCC Bank were not the same. The amounts and dates of fund withdrawals were also different in the genuine and fake bank statements.
The OIG team showed the versions of bank documents provided by Padakhep to senior NCC Bank officials who confirmed that the statements were not issued by the bank. However, the probe body did not find evidence of the practice in DBB Bank accounts.
To maintain consistency between the false bank statements and supporting documentation, Padakhep created, produced and utilised extensive and elaborate false documentation to support fabricated bank statements, and conceal the actual nature of its expenditures.
The accounting journals reflected the transactions in the forged statements.
The OIG in its report placed an accounting journal page and the corresponding genuine and fraudulence bank statements. A transaction of Tk 61,700 for a workshop described in the accounting journal appeared in both genuine and false statements, but a withdrawal of Tk 35,000 was only in the false bank statement.
The OIG team said the amount of Tk 35,000 had never actually been withdrawn.
Padakhep has been working in the fields of micro-credit, education, health, agriculture and environment for 25 years with funds from various international donors. At present, it is running 32 projects all over Bangladesh.
VERSIONS OF PADAKHEP
Terming the report one-sided, Padakhep Executive Director Iqbal Ahammed said Save the Children, being the principal recipient of the fund, was equally responsible if anything happened since it supervised, monitored and audited the project activities.
“Padakhep can't do anything through bypassing Save the Children and its staff. If anything happened then that should have been come out at the time of the happening, but Save the Children had no objection to our activities then,” he said, accusing the OIG of not taking and including its comments in the report.
Asked how he could deny the proof of forgery and fraudulence to conceal a misappropriation of funds, Iqbal Ahammed said that while many points of the report were not correct, they needed to verify the images and the proof used in the report.
“Padakhep is going to challenge the report. We have serious comments on the report, but will not give that since the matter is now before a tribunal,” he told The Daily Star.
REACTION OF SAVE THE CHILDREN
The OIG report clearly establishes that Padakhep has misappropriated not less than $1.89 million of donor funds intended to fight the scourge of HIV and AIDS in Bangladesh, said its Country Director Michael McGrath through an email.
He said the report was the result of more than a year of intensive investigation, involving discussions not only with Padakhep and its bank, but also with health ministry officials and principal and sub-recipients of The Global Fund grants.
“The evidence is overwhelming. Padakhep has been provided with an opportunity to comment on the draft report. If the OIG did not incorporate the changes requested by Padakhep, I can only assume that it was because they were not convinced as to the accuracy or truthfulness of the information provided by Padakhep,” said McGrath.
He termed Padakhep's claim that the principal recipient shared equal culpability for the fraud as absolutely “outrageous”.
“If a criminal is caught by the police and charged with serious crimes, would we say that the police were equally responsible for the crimes committed, because it took them some time to identify the culprit and assemble the evidence?”
The only reason why Padakhep is seeking to prevent public discussion of the OIG report is that they do not want the people, the government and the donors to know the details of the donor fund misappropriation which they have been responsible for over an extended period of time.
Instead of taking action against the NGO, the health ministry has recommended that Padakhep undertake a Tk 24 crore project fighting HIV/AIDS.
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